# Amicus Curiae Brief — Pennsylvania v. United States

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385606_1138%3A6

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1972
- **Citation:** 409 U.S. 894

## Text

§u the Supreme Court of the United States

OCTOBER TERM, 1972

No. 71-1596

COMMONWEALTH OF PENNSYLVANIA, ET AL.,
PETITIONERS
v.:

UNITED STATES OF AMERICA, ET AL.

On Petition for a Writ of Certiorari to the United States
Court of Appeals for the Third Circuit

BRIEF FOR THE INTERSTATE COMMERCE
COMMISSION, AMICUS CURIAE, IN SUPPORT OF
PETITION FOR A WRIT OF CERTIORARI
OPINIONS BELOW

The opinion of the court of appeals (Pet. App. A,
5a-6a) is not yet reported. The order of the district
court (Pet. App. A, la-3a) is also unreported.

JURISDICTION

The judgment of the court of appeals (Pet. App.

_ A, 10a-1la) was entered on March 10, 1972. The
_ petition for a writ of certiorari was filed on June 8,
' 1972. This Court’s jurisdiction is invoked under 28
p US.C. 1254(1).

2

QUESTION PRESENTED

The major issue in this case warranting consider-
ation by this Court is whether the court below erred
in holding that a railroad reorganization court has
jurisdiction to review an order of the Interstate Com-
merce Commission authorizing abandonment of a por-
tion of the railroad’s line, and in enjoining all parties
from instituting or maintaining a suit for review of
that Commission order in a three-judge district court
convened in another district pursuant to the Urgent
Deficiencies Act.

STATUTES INVOLVED

The statutes involved are Section 1(18)-(20) of
the Interstate Commerce Act, 49 U.S.C. 1(18)-(20) ;
Section 77(0) of the Bankruptcy Act, 11 U.S.C. 205
(0); and Sections 1398(a) and 2325 of the Judicial
Code, 28 U.S.C. 1898(a) and 2325 (Pet. App. B,
1b-4b).

STATEMENT

The Central Railroad Company of New Jersey
(CNJ) filed a petition for reorganization on March
22, 1967, in the United States District Court for the
District of New Jersey (the reorganization court).
On May 25, 1971, the Trustee of CNJ filed 30 appli-
cations with the Commission requesting authority to
abandon 30 line segments under Sections 1(18) and
1(20) of the Interstate Commerce Act, 49 U.S.C.

ae

1(18) and 1(20).. These applications include CNJ’s
entire Pennsylvania operations as well as certain of
its New Jersey lines. By an order dated August 20,
1971, the Commission summarily authorized CNJ to
abandon 10 of the 30 lines. The remaining applica-
tions were set for further proceedings before the
Commission.”

Petitioners, who opposed ‘the abandonment in the
Commission proceeding, filed a complaint on Septem-
ber 24, 1971, in the Middle District of Pennsylvania
seeking to enjoin and set aside the Commission’s or-
der authorizing the 10 abandonments. Before that
suit could be prosecuted, however, the reorganization
court, in response to a petition for instructions filed
by the Trustee of CNJ, issued an order (Order No.
445) directing the Trustee to suspend all of CNJ’s
Pennsylvania operations by April 1, 1972, even if
the abandonment applications were stil] pending be-
fore the Commission and further enjoining essentially
all parties from instituting or maintaining any ac-
tion affecting CNJ’s Pennsylvania operations in any
court other than the reorganization court.

* The applications were docketed as F.D. No. 26659 and subs
1-29 thereunder.

2Of the remaining 20 applications, the Commission, in a
decision served June 2, 1972, approved 13 and denied 5 such
applications. CNJ had withdrawn 2 applications in their
entirety. The matter is now pending before the Commission
on petitions for reconsideration.

4

Petitioners’ application to the reorganization court
for leave to proceed in the Pennsylvania suit was
denied, and the Pennsylvania suit has been continued
pending this Court’s decision herein. Thereafter, by
order No. 451, the reorganization court authorized
the Trustee to implement the 10 abandonments ap-
proved by the Commission.

On appeal, the Court of Appeals for the Third
Circuit affirmed the orders of the reorganization
court. Petitioners’ applications for stay pending ap-
peal were denied by the court of appeals, and by Mr.
Justice Stewart on March 27, 1972.

ARGUMENT

The petition presents an important question of
Federal court jurisdiction which is likely to recur in
other railroad reorganization proceedings, and which
appears to be in conflict with prior decisions of this
Court as well as those of other lower Federal courts.

1. At the present time, twelve of the Nation’s
railroads are in reorganization proceedings in various
district courts throughout the country. Several of
the proceedings—including those involving the Penn
Central,’ the Reading,* and the Lehigh Valley "—are

3 In the Matter of Penn Central Transportation Company,
Bankruptcy No. 70-347, E.D. Pa.

+ In the Matter of the Reading Company, Bankruptcy No.
71-828, E.D. Pa.

5 In the Matter of Lehigh Valley Railroad Company, Bank-
ruptcy No. 70-432, E.D. Pa.

—

5

in courts located within the Third Circuit. The deci-
sion of the court below has already been cited by a
major creditor in the New Hope and Ivyland reor-
ganization proceeding, seeking an order directing the
Trustee of that railroad to suspend operations, and
the issue of the reorganization court’s power to re-
view an abandonment order and to enjoin review by
other courts can similarly: be expected to arise in
other reorganization proceedings. Plainly, this is a
matter of sufficient importance to warrant plenary
consideration by this Court.

2. The question presented is important to the lower
Federal courts in defining their respective jurisdic-
tions, and cannot be resolved without guidance from
this Court. The reorganization court’s orders are in
no way binding on the three-judge district court in
the Middle District of Pennsylvania and thus both
courts could have proceeded simultaneously. The fact
that the Pennsylvania court has Stayed its hand
here does not detract from the possibility that it
could have acted and reached a different result than
the reorganization court. See New Haven Inclusion
Cases, 399 U.S. 392, 419 (1970).

3. The decision of the court below is in conflict
with this Court’s decision in Thompson v. Texas
Mexican R. Co., 328 U.S. 134 (1946). In Thompson,
this Court held that “[e]larriers being reorganized

* In the Matter of New Hope and Ivyland Railroad Company,
Debtor, Bankruptcy No. 70-324, E.D. Pa., Motion of South-
eastern Pennsylvania Development Fund for Order Directing
Trustee To Suspend Operations, filed August 1, 1972.

es STEEP TOE GIN ia i al

<a E
6

under §77 of the Bankruptcy Act are not exempt
from” the provisions of §1(18) of the Interstate
Commerce Act, which requires that no carrier may
abandon all or any part of its operations unless and
until the Commission has issued an order authoriz-
ing it todo so. (328 U.S. at 144). And, in language
directly applicable to the case at bar, this Court em-
phasized that “[i]f the order of the Commission were
challenged, its review could of course be had only in
the manner provided by statute. See El Dorado Oil
Works v. United States, 328 U.S. 12.” (328 US.
at 151, fn. 11). The “manner provided by statute”
is, of course, that such orders are only “reviewable
by a district court of three judges.” (El Dorado,
328 U.S. at 19). Here, in contrast, the reorganiza-
tion court has asserted jurisdiction to review the Com-
mission’s abandonment order, and has enjoined the
parties from seeking review before a three-judge
court, as provided by statute. Plainly, this is con-
trary to this Court’s Thompson decision.

Other lower courts dealing with similar issues
have consistently followed the rationale of this Court
in Thompson, holding that orders of the Commis-
sion in cases involving passenger train discontinu-
ances of a railroad in reorganization (which are
analogous to abandonment cases) are subject to re-
view only by a statutory three-judge court and not
by the reorganization court. In Commonwealth of
Pennsylvania v. United States," a three-judge dis-

* Civil Action No, 70-1156, Western District of Pennsyl-
vania, Memorandum Opinion Sur Interlocutory Injunction,

ae

trict court in Pittsburgh denied a motion by the
Penn-Central Transportation Company to transfer a
passenger train discontinuance case to Penn-Central’s
reorganization court. And in In re Penn-Central
Transportation Company, 446 F.2d 1109, 1113 (3rd
Cir. 1971), the Third Circuit itself indicated that
“matters relating to train discontinuance are not or-
dinarily heard by the reorganization court.”

The Commission’s decision authorizing 10 of the
30 line abandonments requested by CNJ was ren-
dered exclusively under the provisions of the Inter-
state Commerce Act. Accordingly, judicial review of
the Commission’s decision must, as this Court held
in Thompson, be before a three-judge district court
in conformance with the statutory scheme for re-
viewing the transportation decisions of the Commis-
sion, and the court below was without jurisdiction
to alter this mode of judicial review. Compare Calla-
way v. Benton, 336 U.S. 132, 142 (1949), where
this Court observed that “Congress did not give the
bankruptcy court exclusive jurisdiction over al] con-
troversies that in some way affect the debtor’s estate
-. + What it did give is exclusive jurisdiction of the
debtor and its property wherever located.”

Arguments that the decision of the court below is
supported by New Haven Inclusion Cases, 399 U.S,
392; and Chicago & North Western Ry. Co. v. United

Conclusion of Law No. 8, dated October 12, 1970, vacated
as moot sub nom. Baker v. Pennsylvania, 401 U.S. 902 (1971).
That case was rendered moot by the passage of the so-called
Railpax legislation during the litigation.

PNG ee

: e.,

States, 52 F. Supp. 65 (N.D. Ill. 1943), affirmed
per curiam 320 U.S. 718, are plainly in error. Those
cases dealt with the reorganization court’s exclusive
jurisdiction to review the Commission’s decisions on
plans of reorganization; they did not involve review
of other decisions of the Commission affecting the
railroad, such as abandonment decisions.* With re-
spect to abandonment of the debtor’s line, § 77(0) of
the Bankruptcy Act provides that the trustee shall
initially determine what lines should be abandoned
in the interest of the debtor’s estate and shall pre-
sent to the reorganization judge petitions for author-
ity to abandon. The judge after notice and hearing
may:

upon order... authorizing any such abandon-
ment or sale, but only with the approval and
authorization of the Commission when required
by the Interstate Commerce Act... (emphasis
added)

The quoted portion of §77(0) clearly shows that:
(1) Congress specifically did not grant any excep-
tion to a reorganizing railroad so far as abandon-
ment of line is concerned; and (2) the procedure to
be followed in the abandonment proceeding is as “re-
quired by the Interstate Commerce Act.” Properly
read, § 77(0) provides that the trustee and the re-

®In the present case, the Commonwealth of Pennsylvania
filed a motion with the Commission to consolidate the CNJ
plan of reorganization and its abandonment applications. That
motion was opposed by the Trustee of CNJ and denied by the
Commission.

——

9

organization court should be “concerned only with
the economic effect of the abandonment on the debt-
or’s estate and reorganization, and that questions of
the effect on public interest are to be left to the In-
terstate Commerce Commission.” In re Boston and
Maine Corporation, 317 F. Supp. 1249, 1252 (D.
Mass. 1970); and In re Fonda, J. & G.R. Co., 95
F, 2d 397, 400 (2nd Cir. 1938). Accordingly, ques-
tions of public interest, which pervade an applica-
tion to abandon rail lines, are to be considered and
reviewed under the substantive standards of the In-
terstate Commerce Act and the procedural scheme
of the Urgent Deficiencies Act.

CONCLUSION

For the foregoing reasons, the petition for a writ
of certiorari should be granted.

Respectfully submitted.

FRITZ R. KAHN,
General Counsel,

BETTY JO CHRISTIAN,
Associate General Counsel,

JAMES F. TAO,
Attorney,
Interstate Commerce Commission,
Washington, D.C. 20428.

September 1972.

woues. GOVERNMENT PRINTING OFFICE; 1972 470011 145

nS IR NN SOC NOR veo

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385606_1138%3A6. Public record. Not legal advice.